Form 2441 from non-custodial parent blocking ex-spouse from filling

[JMR70]

Hello.  It is unclear to me the rules allowed for a non-custodial parent ( 50% custody ) on what is allowed to be used as a deduction in the specific case below.  I have filed and think I may need an amendment.  Here is TLDR on accepted federal filing for 2024.

HOH:  Yes
EIC:  No
Additional child tax credit (form 8812):  empty
Form 2241:  adjusted credit $600  mostly from daycare expenses
Child tax credit:  No

My ex is blocked from filing and gets a cryptic message which mentions form 2241

Ask:  As the non-custodial parent, am I allowed to claim daycare expenses on form 2241 and my ex (custodial parent ) is allowed to claim the child credit and child dependent expenses? 

Thank you

[Opus 17 · Accepted solution]

The IRS ignores state custody orders and only goes by where the child physically lived more than half the nights of the year (183 or more nights).  That is the custodial parent for tax purposes.  The custodial parent is the only parent allowed to use the child to claim HOH, EITC, and the dependent care credit.  Only the $2000 child tax credit can be "split" or transferred to the non-custodial parent through form 2441.

If you are the non-custodial parent (child slept in your home less than 183 nights) you can't claim anything, unless the custodial parent gives you a signed form 8332.  You must mail the original signed form to the IRS with your return, or separately with a cover page form 8453 within 3 days of e-filing.  When entering the dependent interview you would say the child lives with you less than half the year (5 months or less), YES there is a custody order, and YES the other parent has given you a signed form 8332.  Turbotax will give you the child tax credit but not HOH or the dependent care credit.

If you answered the child lived with you, you are claiming benefits that are not allowed, and that is why your ex is blocked.

You need to file an amended return to change your answers, and mail the IRS a signed form 8332.  You do not qualify for the childcare credit or HOH status, unless you provided care in your home for another qualifying child dependent who did live with you more than half the year.

However, your ex is forced to mail their return, because even if you amend, it won't remove the block on her e-filing.  She should print, sign and mail her correct tax return, claiming any benefits she is allowed.  She would answer the dependent interview questions that the child lives with her MORE than half the year (pick 7 months or more), YES there is a custody order, and YES I will give the other parent a signed form 8332.  Turbotax will allow the ex to claim HOH status and EITC (if they qualify) and the dependent care credit, but not the $2000 child tax credit.

See publication 501, special rules for children of divorced or separated parents. 

https://www.irs.gov/forms-pubs/about-publication-501

[JMR70]

Crystal clear and many thanks for such a detailed , prescriptive answer.